Insurtech After Life

From the perspective of advertising, where single, snappy brand names like Coke, Dunkin’, and Think! are favored, DeadHappy was dead from the beginning. Established in 2013 and officially launched in 2019, this online life insurance agency, famous for its tagline ‘life insurance to die for,’ ceased operations after securing $36 million in funding, operating for five active years, and following a controversial ad that led to an apology. Octopus Ventures, a venture capital firm in Europe, has invested in various insurance companies, including ManyPets, a pet insurer in Europe and the US; Neat, a French embedded insurance startup; and Flock, a European fleet insurer. DeadHappy was Octopus Ventures’ first investment in the insurance sector. This decision was influenced by the low number of people in the UK who have life insurance; only 50% of mortgage holders and less than half of parents with children under 18 are covered. Octopus Ventures attributed this to the complicated and inconvenient process of buying insurance, which involves navigating through a wide range of options, including terms, payout amounts, whether the policy should evolve, and whether to include critical illness coverage.

Malcolm Ferguson, an early-stage investor at Octopus Ventures, addressed the traditional insurance broker market’s inefficiencies in a post titled “Our Investment in DeadHappy” on August 22, 2018. He shared his personal experience with buying a term life insurance policy through a broker, noting that while the monthly premium of £15 seemed reasonable, he later discovered the broker earned over £350 in commission from his policy. Ferguson pointed out this discrepancy as indicative of the potential for disruption within the industry, suggesting that traditional broker models could be significantly more expensive for consumers than necessary. As a rule of thumb, if one man’s commission is another man’s lunch, the hungrier of the two wins.

In the UK, insurance brokers sell the majority of life insurance policies, accounting for 70% of sales. DeadHappy, an online and direct insurance broker, initially partnered with Covea Life but later switched to Shepherds Friendly to offer policies with a maximum £350,000 payout. These 10-year policies were age-rated, meaning premiums increased as people got older. Additionally, the policy term could be extended beyond ten years after a health and lifestyle assessment. Beyond life insurance, DeadHappy introduced a death wish platform, allowing individuals to specify their posthumous wishes. However, its marketing strategies, including an ad referencing serial killer Harold Shipman to emphasize life’s unpredictability, sparked controversy and led Covea Life to end the partnership. The company faced criticism from regulatory bodies like the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA). From December 2021 to March 2022, the number of policies grew from 18,600 to 24,000. Assuming this growth rate continued, they might have reached 67,200 policies before ceasing operations. This underscores the lesson that, contrary to some opinions, life insurance can indeed be ‘bought,’ not just ‘sold.’

DeadHappy’s use of skull imagery was polarizing and ultimately proved to be unsustainable, but it passed the litmus test of sparking conversations on Reddit, a social media platform known for its passionate and discerning users. It failed not because of its message but because of its limited product offering. Targeting the 2.2 million UK individuals in the lower-income demographic—a segment often overlooked by traditional life insurance—posed significant risks for national advertising campaigns. Yet, in partnership with All Response Media (ARM), a media planning and buying agency specializing in customer acquisition, DeadHappy increased its monthly direct response TV ad spending from £50,000 to £250,000. Advertising insights showed the effectiveness of morning over evening radio ads, driving a strategy that included poster campaigns and targeted door drops. Despite the innovative approach and engagement with a portion of its target market, DeadHappy struggled to maintain its product offering. The refusal of insurance partners to accept new customers left the brand without a viable product. Now, the real question isn’t just about the feasibility of selling life insurance online; it’s about identifying for whom it is possible to do so on a large scale.

DeadHappy ventured into the market during a period when competitors were targeting niche demographics with specialized life insurance products, such as DadCover for fathers, Our Life Covered for mothers, Reviti for smokers, and Waffle, which wished to offer a bundled policy covering various aspects of life. This leaves us with the bottom line, which is: never confuse campaigning with running a company.